Shares of Blue Owl Capital moved higher, supported by a reaffirmed bullish stance from analysts at TD Cowen, who pointed to strong institutional demand for alternative assets despite near-term headwinds.
The brokerage reiterated its “buy” rating on the stock, even as it lowered its 12-month price target to $14 from $16, implying roughly 54% upside from Friday’s close.
The call helped lift sentiment around the asset manager, which has faced recent pressure amid concerns over redemptions and private credit market risks.
Institutional demand supports long-term outlook
TD Cowen’s constructive view is anchored in continued demand for alternative investments from institutional clients, which remains a key driver for Blue Owl’s long-term growth.
Blue Owl co-CEO Doug Ostrover recently highlighted positive trends across the firm’s real assets platform, including data centers, reinforcing confidence in its broader business model.
Analysts also pointed to the company’s attractive dividend profile as a supportive factor.
With a yield of 9.9%, the stock continues to appeal to income-focused investors, even amid volatility.
Additionally, TD Cowen noted that applying a 20-times multiple to the remaining parts of the business suggests a valuation of around $15 per share, further underpinning the upside case.
“Investors are effectively pricing in (at a minimum) complete extinction of OWL’s ~$35B (in NAV) evergreen complex … expect short-term price chop,” analyst Bill Katz said Monday in the note.
Near-term pressures remain elevated
Despite the positive long-term outlook, analysts cautioned that the stock could experience choppy performance in the near term, particularly through Labor Day, due to elevated redemption activity.
“Reflecting elevated redemption cycle and impact on earnings,” analysts led by Bill Katz wrote, highlighting the potential drag on performance.
Blue Owl’s recent actions have contributed to investor concerns.
The firm sold $1.4 billion of loan assets across three private debt funds and permanently restricted withdrawals from one retail-focused vehicle.
Blue Owl Capital Corporation II, which paused quarterly redemptions, accounted for the largest portion of the sale.
These developments have fueled broader jitters around risks in the nearly $2 trillion private credit market, raising questions about liquidity and investor behavior.
As a result, TD Cowen expects both new and existing investors to remain cautious in the near term.
“Tactically, we expect OCIC/OTIC redemptions to remain elevated, while headline noise in Private Credit could delay 401(k) entry,” Katz wrote, referring to Blue Owl Credit Income Corp. and Blue Owl Technology Income Corp..
Liquidity strength and analyst support offer cushion
Even as redemption pressures persist, TD Cowen emphasized that Blue Owl’s funds maintain sufficient liquidity, reducing the risk of forced asset sales.
“Ample liquidity, even under extreme scenarios, suggesting OWL will not be a ‘forced seller’ of assets,” Katz said.
The firm’s outlook also aligns with broader market sentiment.
According to LSEG data, around three-quarters of the 16 analysts covering Blue Owl have a buy or strong buy rating on the stock.
Blue Owl shares have declined nearly 13% over the past month, largely since the firm restricted withdrawals from one of its retail-focused debt funds.
However, the latest analyst backing appears to have helped stabilize sentiment, supporting the stock’s recent gains.
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